Skyworks Solutions CEO Phil Brace has a pointed message for his colleagues: “We’ve got to walk and chew gum at the same time.”
Brace, who took over the top spot in February, uses the well-worn expression to underscore the need to keep diversifying the Irvine-based company, which is now dependent on Apple for more than 60% of its sales.
Brace succeeded longtime CEO Liam Griffin.
The unexpected shakeup at the top came as the company (Nasdaq: SWKS) disclosed a likely decline in future business from Apple Inc., its biggest customer.
Rival Broadcom Inc., the biggest chipmaker with operations in Orange County, appeared to have picked up market share for Apple’s new iPhone 17, according to analysts at the time.
“Strategically it’s important for us to continue to diversify our revenue,” Brace told the Business Journal on Aug. 19.
“We’re seeing broad-based strength.”
Shares Down, Apple Risk
In the trading session after Griffin announced his resignation and the company forecast a decline in fiscal second quarter sales, the shares dropped 25% to $65.60 on Feb. 6.
They fell even further to a 10-year low of $47.93 and since have rebounded to about $75 each and an $11 billion market cap.
The company has aimed for years to reduce its dependence on Apple, and the goal may be taking on new meaning.
“Because we do a great job, we’re continuing to have big business with them,” Brace said of Apple.
Still, he is cautious. “There’s a certain amount of risk that comes from having so much of your business tied up with one particular customer.”
Brace has made it clear he is spending plenty of time in various areas known as the “non-mobile side of the business.”
“That’s an area where there’s more value to be had,” according to the CEO. He pointed out that that “non-mobile, non-handset part of the business is $1.5 billion and growing.”
The areas of likely further expansion include Wi-Fi, automotive with connected cars and infotainment, watches, various remote devices and data center uses.
“We’re also a very competitive bunch,” according to the CEO.
Skyworks semiconductors are manufactured in the U.S., Singapore and Japan along with a facility in Mexico, according to Brace. The company counts three dozen locations around the world.
He calls San Diego-based Qualcomm “our closest relevant competitor.”
Philip Carter New CFO
Brace will get strong support from newly appointed CFO Philip Carter, who is returning to the company after a stint at Advanced Micro Devices Inc., where he had served as corporate vice president and chief accounting officer since November 2024.
Carter, whose appointment was effective Sept. 8, will be responsible for a whole array of Skyworks functions including financial strategy.
Carter previously worked at Skyworks for more than seven years.
Skyworks boasts some 10,100 employees spread out over 17 countries with about 6,000 customers.
Brace calls his colleagues “some of the smartest people I’ve ever worked with.”
Even before coming to Skyworks in February, Brace had an impressive tech resume.
He was chief executive officer and president of Sierra Wireless Inc. from July 2021 to January 2023, executive vice president of Veritas Technologies from 2019 to 2021 and president of the cloud systems and silicon group at Seagate Technology from 2015 to 2017.
Stronger Visibility Seen
Skyworks on Aug. 5 reported fiscal third quarter sales climbed 6.6% to $965 million; operating income on a non-GAAP basis was $224 million, up about 2.5% from the same quarter a year ago.
“As the CEO, I always think we can do better. But overall I think that I was pleased with our results,” according to the Skyworks CEO.
“We broadened our reach across a growing roster of global OEMs (original equipment manufacturers), securing programs with BYD, Ford, Geely, Nissan and others,” Brace said in a conference call with analysts on Aug. 5. He spoke after the third-quarter earnings release.
Skyworks also said in the earnings release it had secured 5G content across premium Android smartphones, including a flagship model from Samsung Galaxy.
“Our Android revenue in the June quarter was up significantly. It was up just under $100 million,” Rajvindra S. Gill, vice president of investor relations, said during the same conference call according to Seeking Alpha’s transcript.
Skyworks last month said it was moving manufacturing from the eastern Massachusetts city of Woburn to Newbury Park in California as part of a consolidation plan.
“Broadly, across both its business segments Skyworks is seeing relatively stronger visibility as its bookings have improved through the quarter,” said Cody Acree, an analyst and managing director at Benchmark Equity Research, said of the Aug. 5 earnings report.
Skyworks latest results also got positive marks from Raymond James.
“Margin execution remains on track and management announced consolidation of manufacturing footprint, which should drive further efficiency gains in coming quarters,” according to Raymond James analyst and managing director Srini Pajjuri.
“SWKS has a strong presence in IoT (internet of things), auto, and data center markets and is benefiting from both cyclical and secular factors,” Pajjuri said.
President Trump’s Tariffs
President Donald Trump’s tariffs and the countermeasures by other countries have many companies worried about the business impact.
But Brace said “our exposure right now is relatively limited” and the company is “immune from some of the volatility” in semiconductor world.
With a bit of understatement, Brace says the whole area of tariffs is a “pretty dynamic environment.”
Broadcom Touches $1.7T Market Cap
Broadcom Inc., whose rivalry with Skyworks Solutions dates to the latter’s predecessor in the 1990s, is continuing to show a magical touch for semiconductors.
During its fiscal third quarter conference call on Sept. 4, Broadcom CEO Hock Tan disclosed it has an order for more than $10 billion from a new client that analysts speculate is OpenAI.
Afterwards, shares topped $350 each, an all-time high, with a $1.7 trillion market cap (Nasdaq: AVGO).
In the past six weeks, co-founder and Chairman Henry Samueli has seen his Broadcom stock swell by $7.3 billion to $32.3 billion.
Broadcom operated in Orange County for about 20 years before it moved in 2016 to Silicon Valley, where its headquarters are currently in Palo Alto. It maintains offices in Irvine.
Skyworks was formed in 2002 through the merger of Alpha Industries Inc. with the wireless communications business unit of Conexant Systems Inc., which was based in Newport Beach.
—Peter J. Brennan
Wireless is Here to Stay— No Going Back to Plugs
Chip-enabled wireless communication is here to stay and growing—so no going back to plugs.
“Unless you believe that we are going back to an era where we are plugging all of our devices in, which I don’t think we are, wireless technology is really going to be at the core of the future technology base.”
“People are figuring out that semiconductors are key to pretty much everything in the modern world,” which will become increasingly connected.
Semiconductors—commonly referred to as chips—are now dominating headlines with companies such as Nvidia and Intel, while just a few years ago, many people might not have been very aware of them.
“In some ways, we’re back at the peak interest and excitement times in the semiconductor world,” according to Skyworks Solutions CEO Phil Brace.
“We are really at the center of wireless communications,” Brace added. “I like the spot we’re in.”
—Kevin Costelloe
Don’t Bet Against Apple
Elon Musk, Bill Gates and Mark Zuckerberg have said the end may be coming for the ubiquitous smartphone that has become as indispensable as house keys and money for daily life.
But don’t bet on it, says Skyworks Solutions CEO Phil Brace.
“I think many people over the years have bet against Apple and that has not been a favorable result. So, I’m not actually going to make that bet. I don’t think that’s going to end any time soon,” Brace told the Business Journal.
His company gets more than 60% of its revenue from Apple.
“They’re just getting started in AI,” Brace said of Apple.
—Kevin Costelloe
